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19 Jan, 2018 09:17

Russian stocks surge to all-time high on strong ruble momentum

Russian stocks surge to all-time high on strong ruble momentum

The Russian key ruble stock index – MICEX – surged to a historic high on Friday, surpassing the 2,300 mark. The ruble was also near multi-year highs against the US dollar.

The MICEX touched a record 2,306 mark before sliding to 2,288. The dollar-traded RTS Index was trading flat at 1,274 points. The RTS is still far from its record, seen in 2008, when it was double its current level.

The ruble remains one of few currencies in surplus against the greenback over the last 52 weeks. The Russian currency is up over five percent against the dollar in the last year. The ruble was trading at 56.6 against the dollar and 69.5 against the euro.

The World Bank announced last week the Russian economy grew by 1.7 percent in 2017. Similar growth can be expected this year, according to the forecast. However, the upward trend slowed in the last quarter of the year, as GDP contracted 0.3 percent in November.

“We expected that by the end of 2017, the period of recovery after the crisis will kick in, and it happened. We are now at a turning point, and the question is how we will continue to grow,” Governor of the Russian Central Bank Elvira Nabiullina told TASS news agency.

Economists, including former finance minister Aleksey Kudrin, have warned that the Russian economy could grow faster only if the Kremlin implements structural reforms. Usually, structural reforms come at the expense of social spending, and the Kremlin has long postponed such reforms.

Inflation in Russia remains at its lowest level since the collapse of the Soviet Union, falling to 2.5 percent last year. Rapid growth in consumer prices has long been considered one of the biggest woes of the Russian economy.

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